Shares in Mulberry have been hit after its creative director Emma Hill announced she is leaving the luxury handbag firm.

The price dropped more than 6% as the company steels itself to unveil a slump in annual profits.

Since joining in 2008, Ms Hill has been credited with turning the Somerset-based firm from a trusted briefcase and wallet maker into an international fashion powerhouse with a clutch of celebrity fans.

Last year she was made a CBE.

Profits soared as Mulberry's Alexa and Del Rey designs, named after TV presenter Alexa Chung and singer Lana del Rey, were picked up by A-list stars around the world.

But on Thursday the company is expected to reveal its bottom line has been hit by tougher markets in Asia, a post-Christmas fall in tourist spending and attempts to improve the quality of its distribution network.

Shares plunged more than 8% at one point on Monday in the wake of a short announcement that Ms Hill was to quit.

It said: "Emma has informed the company that she wishes to leave after a very successful period at Mulberry during which she has built a strong and talented creative team working for her.

"The timing of her departure is currently under discussion and has yet to be finalised."

The company said its main spring/summer collection for 2014 had been completed and that Ms Hill was continuing to work in the business finalising the London Fashion Week collection, to be launched in September.

Reports suggested that her departure followed "disagreements with management over creative and operational strategy".

A spokesman for the company declined to comment on the claim.

Analysts expect pre-tax profits for the year to the end of March to fall to £26m from last year's £36m when results are announced later this week.

Investors' hopes that Mulberry can regain momentum after better results from other luxury goods brands may be hit by Ms Hill's departure.